Rondot Automotive Essay

941 WordsNov 30, 20124 Pages
Case study 5 Members: (Ma,Lei, Qing Lan Wang, Julie Anto, Neha Kulkarni, Narayanan Ravi) Situation: * Rondot is a wholly owned subsidiary of Rondot Worldwide,a leading global designer and manufacturer of electrical and electronic components.Rondot Automotive operated 85 plants in 25 countries. * The purchasing organization at Rondot automotive had a hybrid structure and the Jackson plant’s purchasing department consisted of four people, including two buyers, a planner (Glen) and Terry Gibson. * Glen had been approached by an enterprise local supplier called Greven E-coating and they provided samples for each family of housings and cost estimates to Glenn. * The technology used in the Greven E-coating is cost effective & uses newer technology. * These samples were sent to Rondot’s quality control department for testing and the results seemed encouraging. * Current situation: * Rondot Automotive was facing considerable global competition and significant pressures from its customers for price reductions. * Total sales and employment at the Jackson plant had steadily declined over the past five years. * The number of employees at the plant had dropped from 1450 to 600 and plant management was under pressure to lower costs and regain market share. * Glenn has the option to do outsourcing on cleaning and painting work to Greven E-Coating. * Glenn needs to come up with an ideal recommendation on how to reduce the cost and propose that to Terry Gibson and Dick Taylor. Basic Issues: * Company to take a decision on insourcing or Outsourcing. * Higher Costs related to cleaning and painting. * Increased global competition and pressure from customers on price reduction. * Lack of technology development to compete in the competition. * Inexperienced planner for a big decision. * Steady

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